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HURRICANE DEAN CAUSES MINIMAL DAMAGE IN MEXICO DESPITE STORM'S HIGH INTENSITY.

With the devastation caused by Hurricane Wilma still fresh on their minds, residents of the Yucatan Peninsula braced for the worst in preparing for Hurricane Dean. When it made landfall, Dean was a Category 5, which was not only was more powerful than Wilma (Category 4) two years ago, but it was also the third-most-intense hurricane in the Atlantic Ocean in recorded history. A hurricane that potent spelled potential disaster. Dean's impact turned out to be much less than anticipated, however, because it made landfall in a sparsely populated area of Quintana Roo and moved at a very fast pace, sparing residents the drenching rains that characterized Wilma.

Even though Dean's damage was less than anticipated, experts at the Servicio Metereologico Mexicano (SMN) say Mexico is not out of the woods yet. SMN forecasters said that four other intense hurricanes of Category 3, 4, or 5 could form before the end of the hurricane season in November. Two of those hurricanes would form in the Atlantic Ocean and two in the Pacific Ocean, according to SMN computer models.

Hurricane misses major cities

Analysts agree that Dean could have created much more havoc in Quintana Roo and Yucatan states had it not skirted large populated areas like Cancun and Merida. In 2005, Wilma inflicted a devastating blow to Cancun, causing the resort city to lose much of its tourism infrastructure, including most of its beaches (see SourceMex, 2005-11-02 and 2005-11-09).

Still, Dean caused property damage to many small communities, including the area where it landed, near Felipe Carrillo Puerto and Othon Blanco, in Quintana Roo state. Early estimates indicated that the storm left about 15,000 families homeless in small villages in Quintana Roo.

"The big challenge is to get quickly to all these villages," Quintana Roo Gov. Felix Gonzalez Canto said in a television interview, "because when the days go by and authorities don't arrive, people begin to get desperate and feel they're not getting the attention they should."

The hurricane caused most of its damage in the interior of the country, even after losing most of its intensity. After hitting Yucatan on Aug. 21, the storm moved briefly into the Gulf of Mexico before re-entering land in Veracruz state and drenching many communities in Hidalgo, Puebla, and Tamaulipas states. Even in those states, Dean hit primarily in communities with relatively low population densities. No deaths were reported immediately in the Yucatan Peninsula, but at least 12 fatalities were reported in the other affected states.

The federal government also breathed a sigh of relief about the less-than-expected damage and promised quick help for the victims of the storm. "Given the fury this hurricane presented, we've come out OK, and we've come out OK because we were prepared," President Felipe Calderon said after a tour of damaged regions. "Now, the challenge is to return to the regions hit by the hurricane to help the families that lost their homes."

Preparations also helped minimize problems

Experts said the preparations before the storm and response in its aftermath also contributed to lessen the impact of Dean. Local and state officials acted more quickly and took warnings more seriously than had been the case with previous storms, including Ivan in 2004 and Wilma in 2005. For example, officials cancelled all flights into Cancun well before the arrival of Dean, in an effort to prevent tourists from arriving at the last minute. Some resort areas and hotels in Quintana Roo were also evacuated even though the arrival of Dean was several days away.

"More than anything else, it's about being prepared," said Jorge Acevedo, a spokesman for Gov. Gonzalez Canto.

Many communities in the Yucatan Peninsula also activated emergency committees that were created for the sole purpose of coordinating a response to the storm.

"Communities are much better prepared than during Hurricanes Ivan or Wilma, which hit the same region," Salvano Briceno, the chief disaster official of the UN, told Reuters. "People are learning from past experiences and are evacuating in time."

Local residents agreed. "The relief was well-coordinated this time. They were in constant communication with us about the storm," said a hotel manager in Playa del Carmen. "They told us before the storm hit, and that gave us plenty of time to secure our homes."

Additionally, the Secretaria de Defensa Nacional (SEDENA) sent soldiers to evacuate communities in the projected path of the hurricane.

Tourism, oil industries escape unscathed

Although Dean's impact was less than anticipated, the sheer magnitude of the hurricane made some economic damage inevitable. The storm disrupted two of the economic sectors that account for the lion's share of Mexico's foreign exchange: tourism and petroleum. The government reported a loss of income in both sectors because activity was disrupted for several days. Both sectors were able to recover very quickly, however, because the storm caused minimal damage to infrastructure. This was especially good news for the tourism sector, which took more than a year to recover from the damage Wilma inflicted on Cancun and the Riviera Maya.

The Quintana Roo tourism secretariat had projected a loss of close to two percentage points of GDP had the state's tourism sector been disrupted significantly for several months. Quintana Roo accounts for about one-third of the approximately 600 billion pesos (US$54.2 billion) earned by the tourism industry in Mexico.

The magnitude of the hurricane had raised concerns that Dean would inflict extensive damage to oil-drilling platforms and major seaports in the Gulf of Mexico. By the time Dean reached the Campeche Sound, however, it had been downgraded to a Category 2. The state-run oil company PEMEX reported very little damage to its facilities, which were back in operation just two days after Dean had passed through the region.

Still, there were economic losses of about US$150 million a day for the three days when the company had to shut down. PEMEX said it stopped producing about 5.2 million barrels of crude oil during this period.

PEMEX was able to resume exports fairly quickly because it already had inventories of about 10.5 million barrels of crude at export terminals, officials for the company's marketing arm Pemex-Comercio Internacional (PMI) said.

At the local level, the federal government has created the Fondo para la Pequena y Mediana Empresa (PYME) to provide direct assistance to small and medium-sized businesses affected by the hurricane. The program, managed by the Secretaria de Economia (SE) and Nacional Financiera (NAFIN), will assist businesses in rural as well as urban areas.

Additionally, the Secretaria de Desarrollo Social (SEDESOL) has allocated about 48.5 million pesos (US$4.4 million) to hire temporary workers to help with clean-up operations in the states of Yucatan, Quintana Roo, Campeche, Veracruz, and Tamaulipas.

Relief efforts accompanied by questions of political motive

As with previous hurricanes, the government's relief efforts are coming under intense scrutiny. In 2005, former President Vicente Fox was accused of using the federal disaster assistance fund (Fondo Nacional de Desastres Naturales, FONDEN) for electoral purposes (see SourceMex, 2005-10-12). In 2006, outgoing Chiapas Gov. Pablo Salazar Mendiguchea was accused of using the disbursement of relief to support the center-left candidate (see SourceMex, 2006-08-23).

Mishandling of relief efforts has also cost some chief executives such as ex-Govs. Patricio Patron Laviada of Yucatan and Antonio Gonzalez Curi of Quintana Roo, former mayor Rene Juarez Cisneros of Acapulco, and former President Ernesto Zedillo some political capital (see SourceMex, 1997-10-22, 1999-02-10, 2002-10-09).

This year, allegations of misuse of funds for electoral purposes have centered around disaster relief in Veracruz, where state legislative and mayoral elections are scheduled on Sept. 2. President Calderon has gone to great lengths to avoid politicizing the distribution of aid, ordering members of his Cabinet to ensure that supplies and other help are disbursed with no strings attached. This has not stopped members of Calderon's Partido Accion Nacional (PAN) in Veracruz from attempting to sway voters. The PAN is distributing bags of bread carrying the party's logo.

The strongest criticisms thus far have been levied against Veracruz Gov. Fidel Herrera, a member of the Partido Revolucionario Institucional (PRI). Representatives of the PAN and the center-left Partido Revolucionario Institucional (PRI) have accused the governor of using state resources, including hurricane relief, to support the campaigns of PRI candidates. Many products distributed have the logo of the state of Veracruz and have a notation implying that they came from the Herrera government. This labeling is found on products as diverse as bottles of cooking oil, cushions, buckets with cleaning supplies, and picks and shovels.

Furthermore, critics say Herrera is using many of his state officials to go out and campaign for PRI candidates. "[The governor] is the number-one electoral crook in this state," said PRD federal Sen. Arturo Herviz.

Controversy also surrounds agricultural aid

Assistance disbursement to the agriculture sector has also become controversial. All the states in the path of the hurricane are governed by the PRI, and critics have charged that the Secretaria de Agricultura, Ganaderia, Desarrollo Rural, Pesca y Alimentacion (SAGARPA) is understating the extent of the damage to limit the amount of money available for agricultural relief.

Agriculture Secretary Alberto Cardenas declined to offer specific estimates on the extent of damage to agriculture in the states affected by Dean. "We are not going to get in a war of numbers" with the state governments, Cardenas said after a tour of the affected areas.

But critics said the government should be generous with its assistance, with 12,000 producers who suffered total losses putting in claims for urgent assistance.

"The damage is very serious," said Hector Pena, an official with the Liga Agraria in Quintana Roo state. "I can assure you that in a few months we will have problems meeting the demand for foodstuffs."

Govs. Ivonne Ortega of Yucatan and Jorge Carlos Hurtado of Campeche asked the federal government to issue a disaster declaration for several areas of their states, so that agricultural producers could obtain quick access to funds. Other governors were expected to make similar requests.

Ortega said Dean caused major damage to more than 30,000 hectares of crops, including fields of habanero peppers in the eastern part of the state. The Yucatan Peninsula, which includes Yucatan, Quintana Roo, and Campeche states, is one of the major habanero-producing areas in the world (see SourceMex, 2005-09-07). Habanero prices were already fairly high, and the losses caused by Dean will worsen the situation, said the Mexico City daily newspaper Reforma.

Agriculture authorities in the Yucatan Peninsula also reported the loss of 150,000 ha of corn, 60,000 ha of citrus, and an undetermined amount of henequen. In addition, local producers in the Yucatan Peninsula reported extensive damage to fields planted with bananas, avocados, cucumbers, squash, jalapeno peppers, and other crops.

Dean also inflicted damage to the agriculture sector in the interior states along the path of the storm, including 135,000 ha of corn and more than 22,000 ha of coffee in Puebla state, and 15,000 ha of various crops in Veracruz. The storm spared the sugarcane crop in Veracruz, where producers reported only minimal damage.

"I have not received any reports of damage that would cause alarm," said Carlos Blackaller Ayala, president of the Union Nacional de Caneros (UNC). Blackaller said the UNC is keeping its projections for sugarcane production to reach 5.4 million metric tons in the 2007-2008 season, which begins in November. This is slightly higher than the 5.3 million MT produced in 2006-2007.

Some environmental damage reported

As with previous hurricanes, the environment suffered significant damage from Dean. More than 2.3 million ha of forests and jungles sustained some damage from the hurricane, according to initial estimates from the Secretaria de Medio Ambiente y Recursos Naturales (SEMARNAT). Most of the damage to forests occurred in Quintana Roo, Yucatan, and Campeche.

"There were different degrees of damage. Some trees only lost their leaves, while others were toppled," said Jose Cibrian, director of the Comision Nacional Forestal (CONAFOR). "In most cases, the affected areas will recover naturally."

Still, Environment Secretary Juan Elvira Quesada said SEMARNAT would devote about 910 million pesos (US$82.1 million) for environmental-recovery efforts in areas affected by Dean. The lion's share of the funds, about 800 million pesos (US$72.2 million), will be allocated to CONAFOR, with 100 million pesos (US$9 million) going to the Comision Nacional de Agua (CONAGUA) and 10 million (US$900,000) to the Comision Nacional de Areas Protegidas (CONANP).

SEMARNAT officials said the hurricane caused negligible damage to natural preserves in the Yucatan Peninsula, including the system of reefs off the coasts of Yucatan and Quintana Roo. Two years ago, Wilma caused destruction in eleven of the area's natural preserves (see SourceMex, 2005-11-09). In additional to the forces of nature, the reefs have suffered from human activity, including damage from several vessels that have destroyed sections of the ancient coral formations (see SourceMex, 2005-03-09 and 2007-06-20). [Note: Peso-dollar conversions in this article are based on the Interbank rate in effect on Aug. 29, reported at 11.07 pesos per US$1.00] (Sources: La Cronica de Hoy, 08/20/07, 08/21/07; Excelsior, 08/21/07; The Christian Science Monitor, 08/22/07; Agencia de noticias Proceso, 08/20/07, 08/22/07, 08/23/07; Associated Press, 08/20/07, 08/21-23/07; Bloomberg news service, 08/21/07, 08/23/07; The New York Times, 08/23/07; El Universal, La Jornada, 08/20/07, 08/21/07, 08/23/07, 08/24/07; Notimex, El Economista, 08/21/07, 08/24/07; Reforma, 08/22-24/07; Los Angeles Times, 08/23/07, 08/24/07; Milenio Diario, 08/20/07, 08/21/07, 08/23/07, 08/24/07, 08/27/07; Reuters, 08/21/07, 08/27/07; Spanish news service EFE, 08/23/07, 08/28/07; La Jornada del Oriente, 08/28/07; Novedades de Quintana Roo, 08/28/07)
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Publication:SourceMex Economic News & Analysis on Mexico
Geographic Code:1MEX
Date:Aug 29, 2007
Words:2331
Previous Article:MEXICAN ECONOMY GROWS SLIGHTLY IN SECOND QUARTER, BUT PROSPECTS UNCERTAIN FOR REST OF YEAR BECAUSE OF U.S. MORTGAGE CRISIS.
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